Enhanced

Defense

Financial

Management

Training

Course

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

American

Society

of

Military

Comptrollers

Student

Guide

•

Revised

2018

Copyright

(()

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

IMPORTANT

NOTE

FOR

STUDENTS

PLANNING

TO

TAKE

THE

CDFM

EXAMS

This

textbook

is

arranged

to

facilitate

teaching

the

Enhanced

Defense

Financial

Management

Training

Course

and

is

designed

to

broaden

the

student's

perspective

by:

•

Introducing

areas

of

financial

management

outside

of

the

student's

daily

responsibilities.

•

Exposing

the

student

to

Department

of

Defense

—as

opposed

to

service

specific

—financial

management

policies

and

procedures.

•

Providing

instruction

in

competency

areas

that

may

be

found

in

the

Certified

Defense

Financial

Manager

(CDFM)

Examinations.

Disclaimer:

Any

of

the

CDFM

Exams

may

include

questions

on

fiscal

law

and

other

topics

that

may

not

be

found

in

the

EDFMTC

textbook.

Copyright

©

2000.

rovsed

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

TABLE

OF

CONTENTS

Learning

Objectives

1.2.1

Study

Guidance

1.2.1

Additional

Information/References

1.2.2

Knowledge

Check

1.2.3

Introduction

to

Defense

Manpower

Management

1.2.5

Defense

Manpower

Management

Defined

1.2.6

Manpower

Concentrations

1.2.6

Manpower

Structure

1.2.7

Mobilization

and

Crisis

Issues

1.2.9

DoD

Manpower

Utilization

Policy

1.2.9

Mobilization

1.2.9

DoD

Total

Force

Policy

1.2.10

Master

Mobilization

Plan

(MMP)

1.2.10

Presidential

Authority

to

Activate

Reserve

Forces

1.2.11

Civilian

Employees

During

Crisis

Situations

1.2.12

Manpower

Estimates

for

Financial

Management/

FTE

Terminology

1.2.13

Department

of

Defense

Separation

Incentives

1.2.14

Federal

Activities

Inventory

Reform

Act

of

1998

1

.2.15

Annual

Lists

of

Government

Activities

Not

Inherently

Governmental

in

Nature

1.2.15

Competition

Required

1.2.16

Realistic

and

Fair

Standard

Competitions

1.2.16

Types

of

Activities

1.2.17

OMB

Circular

A

-76

—Performance

of

Commercial

Activities

1.2.19

Reliable

Cost

and

Performance

Information

1.2.20

Commercial

Activities

(OMB

Circular

A-76

and

DoDI

4100.33)

1.2.22

Management

Study

1.2.22

Performance

VVork

Statement

(PVVS)

1.2.23

Cost

Comparisons

1.2.24

Length

of

the

Process

1.2.24

Official

A-76

Announcements

and

Notifications

1.2.25

The

A-76

Moratorium

1.2.25

Copyright

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2000.

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2018

(v2018a)

by

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American

Society

of

Military

Comptrollers.

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rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

TABLE

OF

CONTENTS

Ethics

1.2.26

Gifts

from

Outside

Sources

1.2.27

Acceptance

of

Gifts

by

Injured

or

Ill

Service

Members

and

Their

Families

1.2.28

Gifts

Between

Employees

1.2.28

Conflicting

Financial

Interests

1.2.29

Financial

Disclosure

1.2.29

Impartiality

in

Performing

Official

Duties

1.2.31

Seeking

Other

Employment

1.2.31

Misuse

of

Position

1.2.32

Outside

Activities

1.2.32

Honoraria

1.2.33

Post

-Employment

1.2.33

Representation

to

Government

Agencies

and

Courts

1.2.34

Supplementation

of

Salary

1.2.34

Informal

Advisory

Letters

and

Memoranda

and

Formal

Opinions

1.2.35

Tables

Table

1.2.1

-

Manpower

Management

Terminology

1.2.8

Table

1.2.2

-

Full

-Time

Equivalent

Terminology

1.2.13

Table

1.2.3

-

OMB

Circular

A-76

Key

Elements

1.2.21

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reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Learning

Objectives

•

Relate

DoD

manpower

financial

budgets

to

manpower

structure.

•

Summarize

mobilization

processes

for

military

and

civilian

personnel.

•

Summarize

requirements

for

Federal

Activities

Inventory

Reform

Act

of

1998

and

its

impact

on

Commercial

Activities

(A-76).

LEARNING

OBJECTIVES

Learning

Objectives

•

Describe

the

key

elements

of

A-76

and

the

DODI

4100.33.

•

Recognize

and

use

terms

defined

in

the

Commercial

Activities

Program.

•

Describe

the

Government's

ethical

standards.

Defense

manpower

management,

as

used

in

fi

nancial

management,

refers

to

the

processes

for

estimating

manpower

requirements

for

budgetary

purposes

and

reporting

manpower

numbers

to

the

Office

of

Management

and

Budget

(OMB).

At

the

completion

of

this

competency

area,

you

should

be

able

to:

•

Relate

DoD

manpower

fi

nancial

budgets

to

manpower

structure.

•

Summarize

mobilization

processes

for

military

and

civilian

personnel.

•

Summarize

the

requirements

for

Federal

Activities

Inventory

Reform

Act

of

1998

and

its

impact

on

Commercial

Activities

(A-76).

•

Describe

the

key

elements

of

OMB

Circular

A-76

and

DODI

4100.33 as

they

relate

to

the

Most

Efficient

Organization

(MEO).

•

Recognize

and

use

the

terms

defined

in

the

Commercial

Activities

Program.

•

Describe

the

Government's

ethical

standards.

STUDY

GUIDANCE

The

Manpower

Management

competency

deals

with

the

fi

nancial

manager's

knowledge

of

manpower

and

force

management

as

they

relate

to

resource

management,

manpower

rules,

regulations,

laws,

and

development

of

manpower

requirements.

This

competency

area

addresses

familiarity

with

and

use

of

Department

of

Defense

separation

incentives

and

Federal

Activities

Inventory

Reform

Act

of

1998.

The

defense

financial

manager

should

also

be

familiar

with

programs

that

impact

manpower

levels,

such

as

the

Commercial

Activities

Program.

Copyright

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2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

1.2.1

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

ADDITIONAL

INFORMATION/REFERENCES

1.2.2

Reference

OMB

Circular

A-11,

Section

32,

Reporting

on

Employment

and

Personnel

Compensation

OMB

Circular

A-76

Performance

of

Commercial

Activities

DoDI

5010.37

Efficiency

Review,

Position

Management,

and

Resource

Request

Determination

11/17/1987

DoDI

1400.32

Civilian

Workforce

Contingency

and

Emergency

Planning

4/24/1995

DoDI

1100.19

Wartime

Manpower

Mobilization

Planning

Policies

and

Procedures

DoDI

4000.19

Interservice

and

Intragovernmental

Support

Agreements

8/9/1995

DoDD

1404.10

DoD

Civilian

Expeditionary

workforce

DoDD

1205.18

FTS

to

Reserve

Components

P.L.

105-270

Federal

Activity

Inventory

Reform

Act

of

1998

18

USC

208

Acts

Affecting

a

Personal

Financial

Interest

5

CFR

2635

Standards

of

Ethical

Conduct

for

Employees

of

the

Executive

Branch

Location

https://www.whitehouse.gov/sites/default/files/omb/

assets/all_current_year/s32.pdf

https://www.whitehouse.gov/sites/default/files/

omb/assets/omb/circulars/a07

6

/

a

76_incl_tech_

correction.pdf

http://dtic.mil/cgi-bin/GetTRDoc?AD=ADA376648

http://dtic.

mil/whs/directives/corres/pdf/140032p.

pdf

http://dtic.

mil/cgi-bin/GetTRDoc?AD=ADA267851

http://dtic.mil/whs/directives/corres/pdf/400019p.

pdf

http://dtic.mil/whs/directives/corres/pdf/140410p.

pdf

http://dtic.

mil/whs/directives/corres/pdf/120518p.

pdf

https://www.gpo.gov//fdsys/pkg/PLAW-105pub1270/pdf/

PLAW-105pub1270.pdf

https://oge.gov/web/oge.nsf/Statutes

https://www.law.cornell.edu/cfr/text/5/part-2635

U.S.

Office

of

Government

Ethics

https://oge.gov/

Joint

Ethics

Regulation

http://ogc.osd.mil/defense_ethics/

FMR

Volume

2A,

Chapter

1

General

Information

http://comptroller.defense.gov/FMR/

Note:

VVebsite

addresses

current

as

of

publication.

Copyright

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2000,

revised

2018

(v2018a)

by

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American

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Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

KNOWLEDGE

CHECK

Instructions:

Answer

each

question

below.

Check

your

answers

against

the

answer

key.

1.

Where

can

the

rules

for

calculating

FTE

employment

be

found?

2.

What

term

is

used

to

refer

to

the

totality

of

units

in

a

DoD

component?

3.

What

term

is

used

to

refer

to

the

authorized

and

programmed

strength

at

the

end

of

the

fi

scal

year

for

the

active

forces,

the

Selected

Reserve,

and

appropriated

-fund

civilian

employees

in

the

FYDP?

4.

What

process

involves

assembling,

organizing,

and

using

manpower

and

material

resources

in

preparation

for

war

or

other

emergency?

5.

What

is

the

maximum

number

of

days

that

units

of

the

Selected

Reserve

and

members

of

the

Individual

Ready

Reserve

may

be

ordered

to

active

duty

(other

than

for

training)

without

the

consent

of

Congress?

6.

What

is

the

maximum

number

of

members

of

the

Selected

Reserve

and

the

Individual Ready

Reserve

who

may

be

on

duty

at

any

one

time?

Of

these,

what

is

the

maximum

number

who

may

be

members

of

the

Individual

Ready

Reserve?

7.

What

term

is

used

to

describe

a

civilian

who

could

be

deployed

to

a

crisis

area?

8.

What

types

of

activities

are

excluded

from

competition

under

OMB

Circular

A-76?

9.

How

frequently

must

Federal

agencies

compile

lists

of

activities

that

are

not

inherently

Governmental?

10.

What

kind

of

activity

is

so

intimately

the

public

interest

as

to

mandate

performance

by

Federal

employees?

11.

What

is

one

of

the

exceptions

to

the

ban

on

gifts

from

outside

sources?

1.2.3

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2000.

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Comptrollers.

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reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

page

intentionally

left

blank

1.2.4

Copyright

0

2000,

revised

2018

(v2018a)

by

the

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Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Strength

Levels

as

of

November

2017

MILLIONS

OF

PEOPLE)

1.4

1,335

M

1.2

1

815.119

0.8

727,381

0.6

0.4

0.2

0

Active

Duty

Forces

Ready

and

Civilian

Work

Stand

-By

Force

Reserves

INTRODUCTION

TO

DEFENSE

MANPOWER

MANAGEMENT

The

mission

of

the

Department

of

Defense

(DOD)

is

provide

a

lethal

Joint

Force

to

defend

the

security

of

our

country

and

sustain

American

influence

abroad.

Reporting

to

the

Secretary

of

Defense

are

three

military

departments

(Army,

Navy,

and

Air

Force)

and

19

defense

agencies.

The

four

Armed

Services

(Army,

Navy,

Air

Force,

and

Marine

Corps)

are

subordinate

to

their

military

departments.

The

military

departments

are

responsible

for

recruiting,

training,

and

equipping

their

forces,

but

operational

control

of

those

forces

is

assigned

to

one

of

the

unified

Combatant

Commands.

The

United

States

Coast

Guard

is

also

part

of

our

US

Armed

Forces

and

also

our

Armed

Services.

It

is

aligned

under

the

Department

of

Homeland

Security;

however,

by

statute,

it

can

be

transferred

to

the

operational

control

of

the

Department

of

Defense

in

wartime.

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(v2018a)

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of

Military

Comptrollers.

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rights

reserved.

1.2.5

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Manpower

Management

The

processes

for

determining

manpower

requirements

for

budgetary

purposes

and

reporting

manpower

strengths

to

OMB

Defense

Manpower

Management

Defined

Defense

manpower

management,

as

used

in

financial

management,

refers

to

the

processes

of

determining

manpower

requirements

for

budgetary

purposes

and

reporting

manpower

strengths

to

the

OMB.

Manpower

Concentrations

For

study

purposes,

Defense

Manpower

Resources

Management

is

separated

into

four

concentrations:

•

Manpower

Structure

•

Mobilization

and

Crisis

Issues

•

Restructuring

Initiatives

Federal

Work

Force

Restructuring

Act

of

1994

Federal

Activities

Inventory

Reform

Act

of

1998

Commercial

Activities

—OMB

Circular

A-76

•

Ethical

Standards

1.2.6

Copyright

©

2000,

revised

2018

(v2018a)

by

the

American

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Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Manpower

Structure

The

Under

Secretary

of

Defense

(Personnel

and

Readiness)

issues

guidance

annually

for

the

Services

to

use

in

preparation

and

administration

of

their

military

and

civilian

manpower

programs.

Within

the

strengths

assigned

by

the

Secretary

of

Defense,

each

service

programs

manpower

using

the

following

guidelines:

•

The

fi

rst

priority

for

programming

manpower

is

major

Combat

Commands

based

on

the

Joint

Chiefs

of

Staff

guidance.

•

Remaining

forces

are

manned,

within

approved

total

strengths,

to

support

combat

forces.

•

Civilian

requirements

are

based

on

planning

and

workload

factors

at

the

minimum

necessary

to

accomplish

the

required

tasks.

•

Manpower

requirements

for

an

area

that

requires

both

military

and

civilian

personnel

are

projected

as

a

total.

•

Civilian

personnel

can

be

used

only

in

positions

that

do

not

require

military

incumbents

by

reasons

of

law,

training,

security,

discipline,

rotation,

or

combat

readiness.

•

Indigenous

personnel

are

utilized

to

the

maximum

extent

practical

consistent

with

security

and

readiness.

For

example,

indirect

Hires

are

indigenous

personnel

hired

by

the

foreign

Government

to

support

the

mission

of

the

DoD.

1.2.7

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Comptrollers.

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rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

TABLE

1.2.1

-MANPOWER

MANAGEMENT

TERMINOLOGY

Term

Definition

Actual

Strength

The

number

of

personnel

in

—or

projected

to

be

in

—an

organization

or

account

at

a

specified

point

in

time.

Assigned

Strength

Actual

strength

of

an

entire

service,

not

necessarily

equal

to

combined

unit

actual

strengths

because

individuals

may

be

assigned

but

not

joined.

Authorized

Strength

The

total

strength

authorized

by

Congress

(for

internal

service

applications

only).

Authorized

strength

may

be

used

synonymously

with

documented

strength.

Average

Strength

The

arithmetic

mean

strength

for

a

specific

time

span.

The

average

strength

for

1

year

is

equivalent

to

work

years.

DoD

Civilian

VVork

Force

U.S.

citizens

or

foreign

nationals

hired

directly

or

indirectly

to

work

for

DoD,

paid

from

appropriated

or

non

-appropriated

funds

under

permanent

or

temporary

appointment.

This

includes

employees

filling

full-time,

part-time,

intermittent,

or

on

-call

positions.

Specifically

excluded

are

all

Government

contractor

employees.

End

Strength

at

the

end

of

a

fiscal

year

is

synonymous

with

end

-year

strength.

Single

point

strengths

for

other

points

in

time

must

be

specified,

such

as

end

first-quarter

strength.

Future

-Year

Defense

Program

(FYDP)

The

official

report

(database)

that

summarizes

the

resources

provided

to

DoD.

The

FYDP

identifies

funding

for

each

appropriation,

manpower

authorization

and

program,

and

selected

types

of

unit

or

equipment

authorizations

by

resource

management

packages

called

program

elements.

Force

Structure

The

totality

of

units

in

a

DoD

component.

Manpower

Programming

The

process

of

compiling

and

projecting

future

manpower

requirements;

documenting

these

requirements;

integrating

them

into

the

overall

planning,

programming,

and

budgeting

process;

and

translating

them

into

a

form

that

provides

a

basis

for

personnel

procurement,

training,

and

assignment.

Peacetime

Strength

The

authorized

and

programmed

strength

at

the

end

of

the

fiscal

year

for

active

forces,

the

Selected

Reserve

(to

include

drilling

reservists,

military

technicians,

and

active

Guard

and

Reserve),

and

appropriated

-fund

civilian

employees

in

the

FYDP.

1.2.8

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2000.

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2018

(v2018a)

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Comptrollers.

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rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Mobilization

&

Crisis

Issues

•

The

DoD

Manpower

Utilization

Policy

•

Mobilization

•

The

DoD

Total

Force

Policy

•

The

DoD

Master

Mobilization

Plan

(MMP)

MOBILIZATION

AND

CRISIS

ISSUES

The

ability

to

make

the

transition

from

peacetime

manning

levels

to

wartime

manpower

demands

and

the

ability

to

provide

fi

ller

and

replacement

personnel

over

the

course

of

a

conflict

are

critical

to

successful

resolution

of

a

crisis.

DoD

Manpower

Utilization

Policy

During

mobilization

or

wartime,

the

DoD

manpower

utilization

policy

is

based

on:

•

Terminating

or

deferring

activities

not

essential

to

the

war

effort

in

order

to

permit

the

reallocation

of

personnel

to

higher

priority

tasks.

•

Assigning

military

personnel

only

to

those

jobs

that

contribute

to

the

war

unless:

Military

incumbency

is

required

by

law.

Possessing

military

-unique

skills

or

experience

is

essential

for

successful

performance

of

required

duties.

Military

authority

or

discipline

is

requisite

to

the

position.

Alternative

manpower

is

not

available.

Mobilization

During

mobilization,

defense

leaders

have

to

consider

the

current

makeup

of

civilian

workforce

and

the

impact

of

mobilization

on

the

depth

of

that

workforce.

Plans

for

the

civilian

workforce

during

contingencies

and

emergencies

shall

include

assessments

and

alternatives

for

the

following:

•

The

loss

of

civilian

employees

who

are

reservists

or

retired

from

military

service

who

may

be

recalled

to

active

duty.

•

The

loss

of

civilian

employees

who

may

be

drafted

into

military

service.

1.2.9

Copyright

C)

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

In

addition

an

expansion

of

military

members

through

mobilization

may

require

an

increase

in

the

civilian

workforce

strength.

Installation

planning

for

civilian

workforce

expansion

and

recruitment

during

contingencies

and

emergencies

shall

include

consideration

of:

•

The

availability

and

use

of

DoD

civilian

retirees.

•

The

placement

of

military

retirees

not

normally

subject

to

military

recall

(those

over

age

60

or

prevented

from

recall

by

serious

disability).

•

The

borrowing

of

employees

from

other

Federal

agencies.

•

The

use

of

contractors.

•

The

use

of

overtime

and

temporary

employees.

DoD

Total

Force

Policy

Under

the

DoD

Total

Force

Policy,

many

military

functions

not

required

during

peacetime

are

assigned

to

the

Reserve

components.

The

execution

of

contingency

operations

may

require:

•

The

mobilization

of

all

or

part

of

the

reserve

components

to

bring

the

force

structure

to

the

levels

required

for

a

particular

conflict.

•

The

augmentation

of

active

and

activated

reserve

units

by

non

-unit

reservists,

recalled

retirees,

volunteers,

and

draftees.

Some

civilians

who

perform

wartime

military

functions

in

peacetime

will

remain

as

emergency

-essential

(E

-E)

employees,

but

most

will

be

replaced

in

theater

by

active

-duty

military

personnel

or

recalled

reservists.

The

military

services

and

Defense

agencies

plan

for

military

force

buildup,

deployment,

employment,

and

sustainment

on

the

assumption

that

an

adequate

civilian

workforce

will

be

available.

Increases

in

peacetime

work

levels

will

require

increased

productivity,

increased

hours

of

work,

and/or

increased

numbers

of

civilian

employees.

Master

Mobilization

Plan

(MMP)

Mobilization

is

the

process

of

assembling,

organizing,

and

using

manpower

and

material

resources

in

preparation

for

war

or

other

emergency.

The

mobilization

process

can

help

deter

war

as

well

as

enhance

warfighting

capability.

The

DoD

MMP

prescribes

mobilization

policies,

authorities,

and

responsibilities

within

DoD.

1.2.10

Copyright

*2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Presidential

Authority

to

Activate

Reserve

Forces

Title

10

USC

12304

gives

the

President

authority

to

activate

reserve

forces,

without

the

consent

of

Congress,

and

order

to

active

duty

(other

than

for

training)

for

not

more

than

365

days:

Selected

Reserve

Individual

Ready

Reserve

Limit

of

200,000

Selected

Reserve

and

Individual

Ready

Reserve

on

active

duty

and

not

more

than

30,000

Individual

Ready

Reserve

Presidential

Authority

to

Activate

Reserve

Forces

10

USC

12304

gives

the

President

authority

to

order

to

active

duty

Selected

Reserve

and

Ready

Reserves:

•

When

the

President

determines

that

it is

necessary

to

augment

the

active

forces

for

any

operational

mission

or

emergency

involving

the

use

or

threatened

use

of

a

weapon

of

mass

destruction,

terrorist

attack,

or

a

threatened

terrorist

attack

in

the

United

States,

the

President

may

authorize

the

Secretary

of

Defense

and

the

Secretary

of

Homeland

Security

(for

the

Coast

Guard),

without

the

consent

of

Congress,

to

order

to

active

duty

(other

than

for

training)

for

not

more

than

365

days

as

follows:

-

Any

unit

of

the

Selected

Reserve.

-

Any

member

of

the

Individual

Ready

Reserve.

•

Not

more

than

200,000

members

of

the

Selected

Reserve

and

the

Individual

Ready

Reserve

may

be

on

active

duty

under

this

section

at

any

one

time,

of

which

not

more

than

30,000

may

be

members

of

the

Individual

Ready

Reserve.

1.2.11

Copyright

CO

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Civilian

Employees

During

a

Crisis

Situation

•

Crisis

Situation

•

Emergency

Essential

(EE)

Non

-Combat

Essential

(NCE)

Capability

-Based

Volunteer

(CBV)

Capability

-Based

Former

Employee

Volunteer

Corps

•

Key

Employees

Civilian

Employees

During

Crisis

Situations

The

following

definitions

apply

to

civilians

during

crisis

situations

based

on

DoDD

1404.10,

23

January

2009,

DoD

Civilian

Expeditionary

Workforce.

•

Crisis

Situation.

A

crisis

situation

is

a

civil

insurrection,

civil

war,

terrorism,

wartime,

or

hostile

condition

that

threatens

physical

harm

or

imminent

danger

to

the

health

or

well

being

of

the

E

-E

civilian

employee.

•

Emergency

Essential

(E

-E).

A

position

-based

designation

to

support

the

success

of

combat

operations

or

the

availability

of

combat

-essential

systems

in

accordance

with

10

USC

1580(e)

and

will

be

designated

as

key

in

accordance

with

Paragraph

4c(5).

A

person

occupying

an

E

-E

position

could

be

deployed

to

a

crisis

area.

•

Non

-Combat

Essential

(NCE).

A

position

-based

designation

to

support

the

expeditionary

requirements

in

other

than

combat

or

combat

support

situations

and

will

be

designated

as

Key

in

accordance

with

Paragraph

4d(5).

•

Capability

-Based

Volunteer

(CBV).

An

employee

who

may

be

asked

to

volunteer

for

deployment,

remain

behind

after

other

civilians

have

evacuated,

or

backfill

other

DoD

civilians

who

have

deployed

to

meet

expeditionary

requirements

in

order

to

ensure

that

critical

expeditionary

requirements

that

may

fall

outside

or

within

the

scope

of

an

individual's

position

are

fulfilled.

•

Capability

-Based

Former

Employee

Volunteer

Corps.

A

collective

group

of

former

(including

retired)

DoD

civilian

employees

who

have

agreed

to

be

listed

in

a

database

as

individuals

who

may

be

interested

in

returning

to

Federal

service

as

a

time

-limited

employee

to

serve

expeditionary

requirements

or

who

can

backfill

for

those

serving

other

expeditionary requirements.

When

these

individuals

are

re-employed,

they

shall

be

deemed

CBV

employees.

•

Key

Employees.

DoD

civilian

employees

in

positions

designated

as

E

-E

and/or

NCE

will

be

designated

key

in

accordance

with

DoDD

1200.7.

1.2.12

Copyright

©

2000.

revised

2018

(v20185)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

FTE

Terminology

•

Full

-Time

Permanent

(FTP)

•

Other

Than

Full

-Time

Permanent

(OTFTP)

•

Turnover

Rate

•

Fill

Rate

•

Lapse

Rate

MANPOWER

ESTIMATES

FOR

FINANCIAL

MANAGEMENT/FTE

TERMINOLOGY

Personnel

budget

estimates

are

prepared

in

terms

of

full-time

equivalent

(FTE)

employment,

as

required

in

OMB

Circular

A-11.

FTE

employment

is

the

total

number

of

regular

straight

-time

hours

(compensable

hours,

not

including

overtime

or

holiday

hours)

worked

by

an

employee

divided

by

the

number

of

compensable

hours

applicable

to

each

fi

scal

year.

Annual

leave,

sick

leave,

compensatory

time

off

and

other

approved

leave

categories

are

considered

"hours

worked"

for

purposes

of

defining

FTE

employment

that

is

reported

in

the

personnel

summary.

TABLE

1.2.2

—FULL-TIME

EQUIVALENT

TERMINOLOGY

Term

Definition

Full

-Time

Permanent

(FTP)

A

position

normally

filled

on

a

permanent

basis

and

having

a

regular

schedule.

Example:

Assume

100

positions

Other

Than

Full

-Time

Permanent

(OTFTP)

All

positions

other

than

full-time

permanent,

including

temporary,

part-time,

and

intermittent.

Turnover

Rate

(TR)

Number

of

employees

who

left

positions

during

a

past

year

divided

by

the

number

of

positions.

Example:

Assume

10

personnel

left

from

our

100

positions.

10

/

100

=

10%

turnover

rate

Fill

Rate

(FR)

The

average

number

of

days

between

an

employee

leaving

a

position

and

the

position

being

filled

divided

by

the

workdays

in

a

year.

Example:

Assume

it

takes

65

workdays

from

an

employee

leaving

until

the

position

is

filled

and

there

are

2080

hours

(260

workdays)

in

the

year:

65

/

260

=

25%

fill

rate

Lapse

Rate

(LR)

Percentage

of

the

year

a

vacancy

occurs

(Turnover

Rate)

times

(Fill

Rate)

=

Lapse

Rate

Example:

(10%

turnover

rate)

x

(25%

fi

ll

rate)

=

2.5%

lapse

rate

Number

of

Positions

to

Budget

2.5%

of

the

100

positions

are

vacant

during

the

year,

therefore

100

—(100

x

2.5%)

=

100

—

2.5

=

97.5

positions

to

budget

1

2

13

Copyright

@

2000.

revised

2018

(v201

8a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

DoD

Separation

Incentives

5

USC

9902(f)

•

Permanent

DoD

Authority

•

Authorizes

buyout

up

to

$40,000*

or

early

retirement

or

both

•

Voluntary

Separation

Incentive

Pay

(VSIP)

•

Voluntary

Early

Retirement

Authority

(VERA)

•

This

lint

is

on

effect

unel

01

0001

toti.3012021

DEPARTMENT

OF

DEFENSE

SEPARATION

INCENTIVES

Title

5

of

the

United

States

Code,

Section

9902(f),

as

enacted

by

section

1101

of

P.L.

108-136,

gives

the

Secretary

of

Defense

permanent

authority

to

establish

programs

under

which

employees

may

be

eligible

for

voluntary

early

retirement

or

be

offered

separation

incentive

pay

(commonly

called

buyouts)

or

both.

This

authority

may

be

used

to

reduce

the

number

of

personnel

employed

by

the

Department

of

Defense

or

to

restructure

the

workforce

to

meet

mission

objectives

without

reducing

the

overall

number

of

personnel.

The

latter

point

is

particularly

significant

since

initial

buyout

legislation

required

the

elimination

of

a

full-time

equivalent

position

for

every

position

vacated

through

a

buyout.

That

is

no

longer

the

case.

The

buyout

program

is

known

as

the

Voluntary

Separation

Incentive

Pay

(VSIP)

program,

and

the

program

for

early

retirement

is

known

as

Voluntary

Early

Retirement

Authority

(VERA).

An

individual can

be

subject

to

either

one

or

both

of

these

programs

at

the

time

of

separation

from

active

service.

The

Department

of

Defense

is

permitted

no

more

than

25,000

buyout

separations

per

year

under

this

authority,

but

this

limitation

does

not

include

any

buyout

separations

subject

to

Base

Realignment

and

Closure

action

or

for

non

-appropriated

fund

employees.

5

USC

9902(f)

requires

that

buyout

payments

(the

lesser

of

$40,000*

or

the

amount

of

the

employee's

severance

pay)

be

paid

from

amounts

available

for

the

employee's

pay,

and

generally,

be

fully

repaid

if

the

employee

rejoins

the

Federal

Government

within

fi

ve

years

of

separation.

An

employee

accepting

a

buyout

cannot

be

re-employed

by

DoD

for

12

months

after

receiving

the

incentive

pay

unless

the

Secretary

of

Defense

approves

an

exception.

*Note:

This

limit

is

in

effect

until

at

least

9/30/2021.

1.2.14

Copyright

OD

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Federal

Activities

Inventory

Reform

Act

of

1998

•

Lists

Required

•

Annual

list

of

activities

performed

by

executive

agency

that

are

not

inherently

governmental

functions.

•

Public

Availability

of

Lists

•

Director

of

the

Office

of

Management

and

Budget

shall

promptly

publish

in

the

Federal

Register

a

notice

that

the

list

is

available

to

the

public.

Federal

Activities

Inventory

Reform

Act

of

1998

Competition

Required

The

head

of

the

executive

agency

shall

use

a

competitive

process

to

select

the

source.

Realistic

and

Fair

Cost

Comparisons

For

the

purpose

of

determining

whether

to

contract,

the

head

of

the

executive

agency

shall

ensure

that

all

costs

are

realistic

and

fair.

FEDERAL

ACTIVITIES

INVENTORY

REFORM

ACT

OF

1998

Annual

Lists

of

Government

Activities

Not

Inherently

Governmental

in

Nature

Section

2

of

the

Federal

Activities

Inventory

Reform

Act

of

1998

specifies

the

process

to

be

followed

to

identify

activities

that

are

not

inherently

Governmental

and

establishes

a

fair

system

of

competition

for

the

activities.

This

process

is

described

below.

Lists

required.

Not

later

than

the

end

of

the

third

quarter

of

each

fi

scal

year,

the

head

of

each

Executive

agency

shall

submit

to

the

Director

of

OMB

a

list

of

activities

performed

by

Federal

Government

sources

for

the

Executive

agency

that,

in

the

judgment

of

the

head

of

the

Executive

agency,

are

not

inherently

Governmental

functions.

The

entry

for

an

activity

on

the

list

shall

include

the

following:

•

The

fiscal

year

for

which

the

activity

first

appeared

on

a

list

prepared

under

this

section.

•

The

number

of

full-time

employees

(or

its

equivalent)

necessary

for

the

performance

of

the

activity

by

a

Federal

Government

source.

•

The

name

of

a

Federal

Government

employee

responsible

for

the

activity

from

whom

additional

information

about

the

activity

may

be

obtained.

OMB

Review

and

Consultation.

The

Director

of

OMB

shall

review

the

Executive

agency's

list

for

a

fi

scal

year

and

consult

with

the

head

of

the

Executive

agency

regarding

the

content

of

the

final

list

for

that

fi

scal

year.

PUBLIC

AVAILABILITY

OF

LISTS.

1.

Publication.

Upon

the

completion

of

the

OMB

review

and

consultation

regarding

a

list

of

an

Executive

agency:

The

head

of

the

Executive

agency

shall

promptly

transmit

a

copy

of

the

list

to

Congress

and

make

the

list

available

to

the

public.

The

Director

of

OMB

shall

promptly

publish

in

the

Federal

Register

a

notice

that

the

list

is

available

to

the

public.

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

1.2.15

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

2.

Changes.

If

the

list

changes

after

the

publication

of

the

notice

as

a

result

of

the

resolution

of

challenge,

the

head

of

the

Executive

agency

shall

promptly:

Make

each

such

change

available

to

the

public

and

transmit

a

copy

of

the

change

to

Congress.

Publish

in

the

Federal

Register

a

notice

that

the

change

is

available

to

the

public.

Competition

Required

Within

a

reasonable

amount

of

time

after

the

date

on

which

a

notice

of

the

public

availability

of

a

list

is

published,

the

head

of

the

Executive

agency

concerned

shall

review

the

activities

on

the

list.

Each

time

the

head

of

the

Executive

agency

considers

contracting

with

a

private

-sector

source

for

the

performance

of

such

an

activity,

the

head

of

the

Executive

agency

shall

use

a

competitive

process

to

select

the

source

(except

as

may

otherwise

be

provided

in

a

law

other

than

this

act,

an

Executive

order,

regulations,

or

any

Executive

Branch

circular

setting

forth

requirements

or

guidance

that

is

issued

by

competent

Executive

authority).

Realistic

and

Fair

Standard

Competitions

For

the

purpose

of

determining

whether

to

contract

with

a

source

in

the

private

sector

for

the

performance

of

an

Executive

agency

activity

on

the

list

on

the

basis

of

a

comparison

of

the

costs

of

procuring

services

from

such

a

source

with

the

costs

of

performing

that

activity

by

the

Executive

agency,

the

head

of

the

Executive

agency

shall

ensure

that

all

costs

(including

the

costs

of

quality

assurance,

technical

monitoring

of

the

performance

of

such

function,

liability

insurance,

employee

retirement

and

disability

benefits,

and

all

other

overhead

costs)

are

considered

and

that

the

costs

considered

are

realistic

and

fair.

Although

the

Federal

Workforce

Restructuring

Act

(FWRA),

which

expired

on

September

30,

1999,

placed

ceilings

on

Executive

Branch

civilian

employment,

agencies

should

not

convert

the

work

of

their

employees

to

contractors

unless

they

fi

rst

undertake

standard

competitions

that

demonstrate

that

such

a

conversion

is

of

financial

advantage

to

the

Government.

In

addition

agencies

should

ensure

that

reductions

in

accordance

with

the

FWRA

are

not

disproportionately

made

in

the

areas

of

students

or

employees

with

disabilities

and

their

aides.

1.2.16

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Activities

Defined

A-76

defines

activities

in

two

categories:

•

Commercial

Activity

•

Inherently

Governmental

Activity

L

tk;X-

,

7

r6V:K

114,

The

Act

of

Governing

-

Monetary

Transactions

and

Entitlements

Types

of

Activities

OMB

CIRCULA

-76

CLASSIFIES

ACTIVITIES

IN

TWO

CATEGORIES:

•

Commercial

Activity.

A

commercial

activity

is

the

process

resulting

in

a

product

or

service

that

is

or

could

be

obtained

from

a

private

sector

source.

Agency

missions

may

be

accomplished

through

commercial

facilities

and

resources,

Government

facilities

and

resources,

or

mixes

thereof,

depending

upon

the

product,

service,

type

of

mission,

and

equipment

required.

•

Inherently

Governmental

Activity.

An

inherently

Governmental

activity

is

one

that

is

so

intimately

the

public

interest

as

to

mandate

performance

by

Federal

employees.

Activities

that

meet

these

criteria

are

not

in

competition

with

commercial

sources,

are

not

generally

available

from

commercial

sources,

and

are

not

subject

to

OMB

Circular

A-76.

INHERENTLY

GOVERNMENTAL

FUNCTIONS

NORMALLY

FALL

INTO

TWO

CATEGORIES:

•

The

Act

of

Governing

(the

discretionary

exercise

of

Government

authority).

Examples

include

criminal

investigations,

prosecutions,

and

other

judicial

functions;

management

of

Government

programs

requiring

value

judgments,

as

in

direction

of

the

national

defense;

management

and

direction

of

the

armed

services;

activities

performed

exclusively

by

military

personnel

who

are

subject

to

deployment

in

a

combat,

combat

support,

or

combat

service

support

role;

conduct

of

foreign

relations;

selection

of

program

priorities;

direction

of

Federal

employees;

regulation

of

the

use

of

space,

oceans,

navigable

rivers,

and

other

natural

resources;

direction

of

intelligence

and

counter

-intelligence

operations;

and

regulation

of

industry

and

commerce,

including

food

and

drugs.

•

Monetary

Transactions

and

Entitlements.

Examples

include

tax

collection

and

revenue

disbursements,

control

of

the

Treasury

accounts

and

money

supply,

and

the

administration

of

public

trusts.

The

following

is

an

illustrative

list

considered

to

be

inherently

Governmental

functions:

•

The

direct

conduct

of

criminal

investigations.

•

The

control

of

prosecutions

and

performance

of

adjudicatory

functions

(other

than

those

relating

to

arbitration

or

other

methods

of

alternative dispute

resolution).

•

The

command

of

military

forces,

especially

the

leadership

of

military

personnel

who

are

members

of

the

combat,

combat

support,

or

combat

service

support

role.

1.2.17

Copyright

0

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

•

The

conduct

of

foreign

relations

and

the

determination

of

foreign

policy.

•

The

determination

of

agency

policy,

such

as

determining

the

content

and

application

of

regulations,

among

other

things.

•

The

determination

of

Federal

program

priorities

or

budget

requests.

•

The

direction

and

control

of

Federal

employees.

•

The

direction

and

control

of

intelligence

and

counter

-intelligence

operations.

•

The

selection

or

non

-selection

of

individuals

for

Federal

Government

employment.

•

The

approval

of

position

descriptions

and

performance

standards

for

Federal

employees.

•

The

determination

of

what

Government

property

is

to

be

disposed

of

and

on

what

terms

(although

an

agency

may

give

contractors

authority

to

dispose

of

property

at

prices

within

specified

ranges

and

subject

to

other

reasonable

conditions

deemed

appropriate

by

the

agency).

•

In

Federal

procurement

activities

with

respect

to

prime

contracts:

The

determination

of

what

supplies

or

services

are

to

be

acquired

by

the

Government

(although

an

agency

may

give

contractors

authority

to

acquire

supplies

at

prices

within

specified

ranges

and

subject

to

other

reasonable conditions

deemed

appropriate

by

the

agency).

The

participation

as

a

voting

member

on

any

source

selection

boards.

The

approval

of

any

contractual

documents,

to

include

documents

defining

requirements,

incentive

plans,

and

evaluation

criteria.

The

awarding

of

contracts.

The

administration

of

contracts

(including

ordering

changes

in

contract

performance

or

contract

quantities,

taking

action

based

on

evaluations

of

contractor

performance,

and

accepting

or

rejecting

contractor

products

or

services).

The

termination

of

contracts.

The

determination

of

whether

contract

costs

are

reasonable,

allocable,

and

allowable.

1.2.18

Copyright

'ID

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

A-76

Cost

Competition

Process

U.

S.

Government

Policy

-

Empowers

Federal

managers

to

make

sound

and

justifiable

business

decisions.

Not

designed

to

simply

contract

out,

but

to:

-

Balance

the

interests

of

the

parties

to

a

make

or

buy

cost

comparison.

-

Provide

a

level

playing

field

in

a

public

and

private

sector

competition.

•

Encourage

competition

and

choice

in

the

management

and

performance

of

commercial

activities.

It

is

the

policy

of

the

U.S.

Government

to:

•

Achieve

economy/enhance

productivity

•

Retain

inherently

government

functions

in-house

•

Rely

on

commercial

sector

OMB

CIRCULAR

A

-76

—PERFORMANCE

OF

COMMERCIAL

ACTIVITIES

OMB

Circular

A-76,

Performance

of

Commercial

Activities,

establishes

Federal

policy

regarding

the

performance

of

commercial

activities

and

implements

the

statutory

requirements

of

the

Federal

Activities

Inventory

Reform

Act

of

1998,

P.L.

105-270.

The

supplement

to

this

Circular

sets

forth

the

procedures

for

determining

whether

commercial

activities

should

be

performed

under

contract

with

commercial

sources

or

in-house

using

Government

facilities

and

personnel.

OMB

Circular

A-76

is

designed

to

empower

Federal

managers

to

make

sound

and

justifiable

business

decisions.

It

is

not

designed

to

simply

contract

out;

rather,

it

is

designed

to:

•

Balance

the

interests

of

the

parties

to

a

make

or

buy

cost

comparison.

•

Provide

a

level

playing

fi

eld

in

a

public

and

private

sector

competition.

•

Encourage

competition

and

choice

in

the

management

and

performance

of

commercial

activities.

It

is

the

policy

of

the

U.S.

Government

to:

•

Achieve

Economy

and

Enhance

Productivity.

Competition

enhances

quality,

economy,

and

productivity.

Whenever

commercial

-sector

performance

of

a

Government

-operated

commercial

activity

is

permissible,

in

accordance

with

OMB

Circular

A-76

and

its

supplement,

comparison

of

the

cost

of

contracting

and

the

cost

of

in-house

performance

shall

be

performed

to

determine

who

will

do

the

work.

When

conducting

standard

competitions,

agencies

must

ensure

that

all

costs

are

considered

and

that

these

costs

are

realistic

and

fair.

•

Retain

Governmental

Functions

In

-House.

Certain

functions

are

inherently

Governmental

in

nature,

being

so

intimately

the

public

interest

as

to

mandate

performance

only

by

Federal

employees.

These

functions

are

not

in

competition

with

the

commercial

sector;

therefore,

these

functions

shall

be

performed

by

Government

employees.

•

Rely

on

the

Commercial

Sector.

The

Federal

Government

shall

rely

on

commercially

available

sources

to

provide

commercial

products

and

services.

In

accordance

with

the

provisions

of

this

circular

and

its

supplement,

the

Government

shall

not

start

or

carry

on

any

activity

to

provide

a

commercial

product

or

service

if

the

product

or

service

can

be

procured

more

economically

from

a

commercial

source.

Copyright

0

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

1.2.19

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Reliable

Cost

and

Performance

Information

Reliable

cost

and

performance

information

is

crucial

to

the

effective

management

of

Government

operations

and

to

the

conduct

of

competitions

between

public

or

private

-sector

offerors.

Listed

below

are

a

number

of

initiatives

to

generate

cost

and

performance

information:

•

The

Chief

Financial

Officers

(CFO)

Act

of

1990

includes,

among

the

functions

of

Chief

Financial

Officers,

"the

development

and

reporting

of

cost

information"

and

"the

systematic

measurement

of

performance."

This

includes

performance

by

in-house,

contract,

or

Interservice

Support

Agreement

(ISSA)

resources.

•

The

Government

Performance

and

Results

Act

(GPRA)

of

1993

mandates

performance

measurement

by

Federal

agencies.

•

In

1995,

the

Federal

Accounting

Standards

Advisory

Board

(FASAB)

recommended

standards

for

managerial

cost

accounting,

which

were

approved

by

the

Director

of

OMB,

the

Secretary

of

the

Treasury,

and

the

Comptroller

General.

These

standards

were

issued

as

the

Statement

of

Federal

Financial

Accounting

Standards

Number

4

(SFFAS

No.

4),

"Managerial

Cost

Accounting

Standards

for

the

Federal

Government."

The

Supplement

to

OMB

A-76

relies

on

the

managerial

cost

accounting

and

performance

standards

established

in

support

of

the

CFO

Act,

GPRA,

and

the

Federal

Accounting

Standards,

as

they

are

developed

and

implemented.

Cost

and

performance

information

developed

for

standard

competitions

required

by

the

circular

and

this

supplement

should

be

drawn

from

the

database

established

by

these

standards

and

adjusted

as

appropriate.

1.2.20

Copyright

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

TABLE

1.2.3-0MB

CIRCULAR

A-76

KEY

ELEMENTS

Key

Elements

Explanation

Conversion

to

Contract

A

conversion

to

contract

is

the

changeover

of

an

activity

from

Government

performance

to

performance

under

contract

by

a

commercial

source.

Conversion

to

In-house

A

conversion

to

in-house

is

the

changeover

of

an

activity

from

performance

under

contract

to

Government

performance.

Commercial

Source

A

commercial

source

is

a

business

or

other

non

-Federal

activity

located

in

the

United

States,

its

territories

and

possessions,

the

District

of

Columbia,

or

the

Commonwealth

of

Puerto

Rico,

which

provides

a

commercial

product

or

service.

Cost

Comparison

A

cost

comparison

is

the

process

of

developing

an

estimate

of

the

cost

of

Government

performance

of

a

commercial

activity

and

comparing

it,

in

accordance

with

the

requirements

of

the

Supplement,

to

the

cost

to

the

Government

for

contract

performance

of

the

activity.

Most

Efficient

Organization

(MEO)

The

MED

refers

to

the

Government's

in-house

organization

to

perform

a

commercial

activity.

It

may

include

a

mix

of

Federal

employees

and

contract

support.

It

is

the

basis

for

all

Government

costs

entered

on

the

Cost

Comparison

Form.

The

ME0

is

the

product

of

the

Management

Plan

and

is

based

upon

the

Performance

Work

Statement

(PWS).

Performance

Work

Statement

(PWS)

A

PWS

is

a

statement

of

the

technical,

functional,

and

performance

characteristics

of

the

work

to

be

performed,

identifies

essential

functions

to

be

performed,

and

determines

performance

factors,

including

the

location

of

the

work,

the

units

of

work,

the

quantity

of

work

units,

and

the

quality

and

timeliness

of

the

work

units.

It

serves

as

the

scope

of

work

and

is

the

basis

for

all

costs

entered

on

the

Cost

Comparison

Form.

1.2.21

Copyright

0

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

AB

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

1.2.22

OMB

Circular

A-76

Cost

Competition

Process

CONGRESS

NOTIFIED

ilst

and

Last

SteD)

Contract

Awarded

or

MEG

Implemented

Request

Study

Contract

Award

Study

Admin

Appeals

Contract

Develop

ME0

Complete

Independent

Decision

Review

Start

Cost

Study

Comparison

Complete

Solicitation

PWS

Issued

A-76

Cost

Competition

Process

Management

Study

Management

Study:

o

Is

Mandatory.

o

Identifies

the

most

efficient

and

cost-effective

in-house

organization

for

accomplishing

the

Performance

Work

Statements

(the

MEO).

The

MEO

is

the

basis

of

the

government

estimate.

Commercial

Activities

(OMB

Circular

A-76

and

DoDI

4100.33)

Promoting

the

use

of

commercial

activities

(CA)

is

one

approach

to

improving

the

efficiency

of

Government.

OMB

Circular

A-76

establishes

Federal

policy

regarding

the

performance

of

a

CA.

The

supplement

establishes

the

procedures

for

determining

whether

a

CA

should

be

performed

under

contract

with

commercial

sources

or

in-house

using

Government

facilities

or

personnel.

DoDI

4100.33

contains

DoD

procedures

for

CA

in

the

United

States,

its

territories

and

possessions,

the

District

of

Columbia,

and

the

commonwealth

of

Puerto

Rico.

Management

Study

A

management

study

is

performed

to

analyze

completely

the

method

of

operation

necessary

to

establish

the

most

efficient

or

cost-effective

in-house

organization

(MEO)

needed

to

accomplish

the

requirements

in

the

PWS.

The

MEO

must

reflect

only

approved

resources

for

which

the

CA

has

been

authorized.

DoDI

4100.33

states

that:

•

The

CA

management

study

is

mandatory.

The

study

shall

identify

essential

functions

to

be

performed,

and

determine

performance

factors,

organization

structure,

staffing,

and

operating

procedures

for

the

most

efficient

and

cost-effective

in-house

performance

of

the

CA.

•

The

MEO

becomes

the

basis

of

the

Government

estimate

for

the

cost

comparison

with

potential

contractors.

In

this

context,

"efficient,"

or

"cost-effective"

means

that

the

required

level

of

workload

(output),

as

described

in

the

PWS,

is

accomplished

with

as

little

resource

consumption

(input)

as

possible

without

degradation

in

the

required

quality

level

of

products

or

services.

•

DoD

components

have

formal

programs

and

training

for

the

performance

of

management

studies.

•

If

a

CA

provides

critical

or

sensitive

services,

the

management

study

shall

include

a

plan

for

expansion

in

emergency

situations.

•

Early

in

the

management

study,

management

will

solicit

the

views

of

the

employees

in

the

CA

under

review,

and/or

their

representatives

for

their

recommendations

as

to

the

MEO

or

ways

to

improve

the

method

of

operation.

Copyright

©

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

•

The

management

study

will

be

the

basis

on

which

the

DoD

component

certifies

that

the

Government

cost

estimate

is

based

on

the

most

efficient

and

cost-effective

organization

practicable.

•

DoD

components

shall

establish

procedures

to

ensure

that

the

in-house

operation,

as

specified

in

the

MEO,

is

capable

of

performing

in

accordance

with

the

requirements

of

the

PWS.

•

A

management

study

is

not

required

for

streamlined

cost

-comparisons;

however

MEO

analysis

and

certification

are

required.

A-76

Cost

Competition

Process

Performance

Work

Statements

Performance

Work

Statements

(PWSs)

state

the

technical,

functional,

and

performance

characteristics

of

the

work

to

be

performed.

The

PWS:

•

Serve

as

the

scope

of

work

for

making

cost

comparisons.

•

Outline

performance

standards

that

are

used

to

ensure

a

comparable

level

of

performance

for

both

government

and

contractor

and

provides

a

common

basis

for

evaluation.

Performance

Work

Statement

(PWS)

A

Performance

Work

Statement

(PWS)

states

the

technical,

functional,

and

performance

characteristics

of

the

work

to

be

performed

and

serves

as

a

scope

of

work

for

making

cost

comparisons.

The

PWS

generally

includes

reasonable

performance

standards

that

can

be

used

to

ensure

a

comparable

level

of

performance

for

both

Government

and

contractor

and

a

common

basis

for

evaluation.

Employees

should

be

encouraged

to

participate

in

preparing

or

reviewing

the

PWS.

Each

DoD

component

shall

perform

the

following

tasks:

•

Prepare

PWSs

where

needed.

•

Monitor

the

development

and

use

the

prototype

PWSs.

•

Review

and

initiate

action

to

correct

PWS

discrepancies.

•

Approve

prototype

PWSs

for

component

-wide

use.

•

Coordinate

these

efforts

with

the

other

DoD

components

to

avoid

duplication

and

to

provide

mutual

assistance.

•

Make

available

Government

-owned

facilities,

equipment,

and

real

property

to

contractors,

unless

a

cost

-benefit

analysis

indicates

that

retention

for

use

elsewhere

is

more

cost-effective

for

the

Government.

If

a

cost

-benefit

analysis

is

to

be

performed,

then

the

solicitation

and

the

cost

-comparison

must

reflect

both

options.

Decisions

to

not

provide

facilities,

equipment,

or

real

property

to

contractors

shall

be

made

at

a

level

no

lower

than

the

DoD

component's

central

point

of

contact

office

unless

both

options

are

an

integral

part

of

the

solicitation

and

cost

-comparison.

If

a

Commercial

Activity

(CA)

provides

critical

or

sensitive

services,

the

PWS

shall

include

sufficient

in-house

organization

and

commercial

sources

to

prepare

a

plan

for

expansion

in

emergency

situations.

1.2.23

Copyright

©

2000.

revised

2016

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

1.2.24

A-76

Cost

Competition

Process

Cost

Comparisons

Cost

Comparisons

compare

the

estimated

cost

of

government

performance

of

a

CA

with

the

government's

cost

for

contract

performance

of

the

activity.

The

non

-incumbent

of

the

work

must

beat

the

incumbent

by

10%

of

the

government

personnel

costs.

Cost

Comparisons

A-76

Cost

Competition

Process

Cost

Comparisons

•

All

direct

personnel

costs

must

be

estimated

on

the

basis

of

civilian

performance.

•

Neither

funds

nor

manpower

authorizations

shall

be

removed

from

the

activity

budget

in

anticipation

of

the

outcome

of

a

cost

comparison

study.

A

cost

comparison

involves

developing

an

estimate

of

the

cost

of

Government

performance

of

a

CA

and

comparing

it,

in

accordance

with

the

requirements

of

the

supplement,

to

the

Government's

cost

for

contract

performance

of

the

activity.

Commercial

bids

must

be

at

least

ten

percent

below

in-house

personnel

-related

cost.

If

performance

of

a

CA

by

DoD

personnel

cannot

be

justified

under

national

defense,

non

-availability

of

commercial

source,

or

patient

care

criteria,

then

a

full

-cost

comparison

shall

be

conducted

to

determine

if

performance

by

DoD

employees

is

justified

on

the

basis

of

lower

cost.

Summarized

below

are

the

requirements

for

a

cost

comparison

from

DoDI

4100.33:

•

Because

the

cost

comparison

may

conclude

that

a

commercial

source

could

perform

the

activity

at

a

comparable

cost,

and

therefore,

that

the

work

could

be

done

by

non-military

personnel,

all

direct

personnel

costs

shall

be

estimated

on

the

basis

of

civilian

performance.

•

Funds

shall

be

budgeted

to

cover

either

the

cost

of

the

appropriate

in-house

operation

required

to

accomplish

the

work

or

the

estimated

cost

of

the

contract.

Neither

funds

nor

manpower

authorizations

shall

be

removed

from

the

activity's

budget

in

anticipation

of

the

outcome

of

a

cost

-comparison

study.

Length

of

the

Process

The

time

period

for

a

standard

competition

is

12

months,

extendable

to

18

months

with

approval.

If

the

competition

is

conducted

under

"streamlined"

procedures

the

time

limit

is

90

days,

extendable

another

45

days

with

approval.

The

streamlined

process

may

be

used

if

the

competition

involves

65

full-time

equivalent

employees

or

fewer.

Under

the

streamlined

process,

the

10%

factor

is

not

applicable.

C

(

7

-

Copyright

(fD

2000,

revised

2018

(v20180)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

A-76

Cost

Competition

Process

Announcements

&

Notifications

-

Official

A-76

announcement

and

notifications

-

DoDI

4100.33

Congressional

notification

Employee

notification

Official

A-76

Announcements

and

Notifications

After

the

official

announcement

of

an

A-76

cost

comparison,

the

maximum

time

to

convert

to

an

ME0

is

24

months

for

single

functions

and

48

months

for

multiple

functions.

NOTIFICATIONS

boDI

4100.33

requires

the

following

notifications:

•

Congressional

Notification.

DoD

components

shall

notify

Congress

of

the

intention

to

do

a

cost

comparison

involving

46

or

more

DoD

civilian

personnel.

The

DoD

Component

shall

notify

the

USD(P&R)

of

any

such

intent

at

least

fi

ve

working

days

before

the

congressional

notification.

The

cost

-comparison

process

begins

on

the

date

of

congressional

notification.

•

DoD

Employee

Notification.

DoD

components

shall

consult

with

DoD

civilian

employees

who

will

be

affected

by

the

cost

comparison.

A-76

Moratorium

For

several

years

Congress

has

imposed

a

moratorium

on

public

-private

competitions

under

A-76

or

any

other

regulation.

DoD

is

subject

to

a

government

-wide

moratorium,

most

recently

imposed

by

the

2018

Consolidated

Appropriations

Act,

Division

E,

General

Provision

742.

DoD

is

further

restricted

by

Public

Law

111-84,

Section

325

which

requires

a

report

and

certification

prior

to

any

DoD

public

-private

competitions.

Both

of

these

statutes

are

temporary

in

nature,

and

the

moratorium

could

be

lifted

at

any

time.

The

moratorium

does

not,

however,

apply

to

competitions

under

A-76

where

the

work

is

currently

being

done

by

the

private

sector

and

the

competition

could

potentially

bring

the

work

in-house.

Thus,

private

-public

competitions,

sometimes

known

as

"reverse

A-765",

are

still

authorized.

1.2.25

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

ETHICS

A

critical

part

of

resource

management

is

understanding

ethical

standards.

Executive

Branch

(DoD)

employees hold

their

positions

as

a

public

trust

and

American

citizens

have

a

right

to

expect

that

all

employees

will

place

loyalty

to

the

Constitution,

laws,

and

ethical

principles

above

private

gain.

Employees

fulfill

that

trust

by

adhering

to

general

principles

of

ethical

conduct

as

well

as

specific

ethical

standards.

The

Department

of

Defense

implements

the

ethics

provisions

of

the

U.S.

Code

and

the

U.S.

Code

of

Federal

Regulations

(5

CFR

2635)

through

the

Joint

Ethics

Regulation,

DoD

5500.7-R.

The

Joint

Ethics

Regulations

governs

the

actions

of

DoD

members.

1.2.26

Ethics

Core

concepts:

•

Employees

shall

not

use

public

office

for

private

gain.

•

Employees

shall

act

impartially

and

not

give

preferential

treatment

to

any

private

organization

or

individual.

Ethics

Core

concepts:

•

Employees

must

strive

to

avoid

any

action

that

would

create

the

appearance

that

they

are

violating

the

law

or

ethical

standards.

5

CFR

2635.101

states

14

general

principles

that

broadly

define

the

obligations

of

public

service.

Underlying

these

14

principles

are

two

core

concepts:

•

Employees

shall

not

use

public

office

for

private

gain.

•

Employees

shall

act

impartially

and

not

give

preferential

treatment

to

a

private

organization

or

individual.

In

addition,

employees

must

strive

to

avoid

any

action

that

would

create

the

appearance

that

they

are

violating

the

law

or

ethical

standards.

By

observing

these

general

principles,

employees

help

to

ensure

that

citizens

have

complete

confidence

in

the

integrity

of

Government

operations

and

programs.

Copyright

02000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Ethics

Areas

for

Study

•

Gifts

from

outside

sources

•

Gifts

between

employees

•

Conflicting

financial

interests

•

Seeking

other

employment

•

Outside

activities

Gifts

from

Outside

Sources

Executive

Branch

employees

are

subject

to

restrictions

on

the

gifts

that

they

may

accept

from

sources

outside

the

Government.

Generally,

they

may

not

accept

gifts

that

are

given

because

of

their

official

position

or

that

come

from

certain

interested

sources

("prohibited

sources").

Prohibited

sources

include

persons

(or

an

organization

made

up

of

such

persons)

who

do

the

following:

•

Seek

official

action

by

the

employee's

agency.

•

Do

or

seek

to

do

business

with

the

employee's

agency.

•

Are

regulated

by

the

employee's

agency.

•

Have

interests

that

may

be

substantially

affected

by

performance

or

non-performance

of

the

employee's

official

duties.

There

are

a

number

of

exceptions

to

the

ban

on

gifts

from

outside

sources.

These

ceptioris

would

allow

the

acceptance

of

gifts

in

the

following

circumstances:

•

Where

the

value

of

the

gift

is

$20

or

less

(not

to

exceed

$50

annually).

•

VVhere

the

gift

is

based

solely

on

a

family

relationship

or

personal

friendship.

•

Where

the

gift

is

based

on

an

outside

business

or

employment

relationship.

•

Where

the

gift

is

in

connection

with

certain

political

activities.

Employees

may

accept

gifts

of

free

attendance

at

certain

widely

attended

gatherings

provided

that

there

has

been

a

determination

that

attendance

is

in

the

interest

of

the

agency.

Invitations

from

non

-sponsors

of

the

event

may

be

accepted

provided

that

certain

additional

conditions

are

met.

There

are

also

exceptions

for

discounts,

awards

and

honorary

degrees,

certain

social

events,

meals,

refreshments,

and

entertainment

in

foreign

countries.

These

exceptions

are

subject

to

some

limitations

on

their

use.

For

example,

an

employee

can

never

solicit

or

coerce

the

offering

of

a

gift.

Nor

can

an

employee

use

exceptions

to

accept

gifts

on

such

a

frequent

basis

that

a

reasonable

person

would

believe

that

the

employee

was

using

public

office

for

private

gain.

Some

other

things

are

not

treated

as

gifts

and

may

be

accepted

without

any

limitations.

Modest

refreshments

(such

as

coffee

and

donuts),

greeting

cards,

plaques

and

other

items

of

little

intrinsic

value,

rewards

and

prizes

open

to

the

general

public,

and

pension

benefits

from

a

former

employer

are

just

a

few

examples.

1.2.27

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

If

an

employee

has

received

a

gift

that

cannot

be

accepted,

the

employee

may

return

the

gift

or

pay

its

market

value.

If

the

gift

is

perishable

and

it

is

not

practical

to

return

it,

the

gift

may,

with

approval,

be

given

to

charity

or

shared

in

the

office.

Acceptance

of

Gifts

by

Injured

or

Ill

Service

Members

and

Their

Families

Effective

September

11,

2001,

certain

covered

DoD

employees,

military

members,

and

their

families

may

accept

unsolicited

gifts

from

non

-Federal

entities,

subject

to

certain

limitations

identified

in

the

Joint

Ethics

Regulation,

Paragraph

3-400.

For

gifts

with

an

aggregate

market

value

in

excess

of

"minimal

value,"

per

source,

per

occasion,

or

with

an

aggregate

market

value

exceeding

$1,000

from

any

one

source,

an

agency

ethics

official

must

make

a

written

determination

that

the

gift

in

question

meets

the

criteria

of

the

law.

Gifts

Between

Employees

Executive

Branch

employees

may

not

make

a

gift

to

an

official

superior

nor

can

an

employee

accept

a

gift

from

another

employee

who

receives

less

pay

except

in

certain

circumstances

or

on

certain

occasions.

On

the

other

hand,

there

are

no

restrictions

to

gifts

from

superiors

to

subordinates.

On

an

occasional

basis,

including

occasions

when

gifts

are

traditionally

given

or

exchanged,

the

following

individual

gifts

to

a

supervisor

are

permitted:

•

Gifts

other

than

cash

that

are

valued

at

no

more

than

$10.

•

Food

and

refreshments

shared

in

the

office

among

employees.

•

Personal

hospitality

in

the

employee's

home

that

is

the

same

as

that

customarily

provided

to

personal

friends.

•

Gifts

given

in

connection

with

the

receipt

of

personal

hospitality

that

is

customary

to

the

occasion.

•

Transferred

leave

provided

that

it

is

not

to

an

immediate

superior.

On

certain

special

infrequent

occasions,

a

gift

may

be

given

that

is

appropriate

to

the

occasion.

These

occasions

include

the

following:

•

Events

of

personal

significance

such

as

marriage,

illness,

or

the

birth

or

adoption

of

a

child.

•

Occasions

that

terminate

the

subordinate

-official

superior

relationship

such

as

retirement,

resignation,

or

transfer.

•

Employees

may

solicit

or

contribute,

on

a

strictly

voluntary

basis,

nominal

amounts

for

a

group

gift

to

an

official

superior

on

special

infrequent

occasions

and

occasionally,

for

items

such

as

food

and

refreshments,

to

be

shared

among

employees

at

the

office.

Regardless

of

the

number

of

DoD

employees

contributing

to

a

gift

or

gifts

on

these

occasions,

a

DoD

employee

may

not

accept

a

gift

or

gifts

from

a

donating

group

if

the

market

value

exceeds

an

aggregate

of

$300

and

if

the

DoD

employee

knows

or

has

reason

to

know

that

any

member

of

the

donating

group

is

his

subordinate.

The

$10

limitation

per

subordinate

still

applies.

1.2.28

Copyright

©

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Conflicting

Financial

Interests

Executive

Branch

employees

are

prohibited

by

18

USC

208(a)

from

participating

personally

and

substantially

in

a

particular

matter

that

will

affect

certain

fi

nancial

interests.

These

include

the

fi

nancial

interests

of:

•

The

employee.

•

The

employee's

spouse

or

minor

child.

•

The

employee's

general

partner.

•

An

organization

in

which

the

employee

serves

as

an

officer,

director,

trustee,

general

partner,

or

employee.

•

A

person

with

whom

the

employee

is

negotiating

for

or

has

an

arrangement

concerning

prospective

employment.

An

employee

may

deal

with

a

potential

conflict

of

interest

in

a

number

of

ways.

The

employee

may

simply

not

participate

in

the

matter

that

would

pose

the

conflict.

This

is

called

"recusal."

The

employee

may

also

obtain

a

waiver

from

the

agency,

sell

off

or

"divest"

the

conflicting

interest,

or

resign

from

the

conflicting

position.

Which

remedy

is

appropriate

will

depend

upon

the

particular

circumstances.

Agencies

may,

by

supplemental

regulation,

prohibit

or

restrict

the

holding

of

certain

financial

interests

by

all

agency

employees

or

groups

of

employees,

and

a

few

extend

such

restrictions

to

the

employee's

spouse

and

minor

children.

Financial

Disclosure

The

Office

of

Government

Ethics

(OGE)

oversees

the

administration

of

public

and

confidential

financial

disclosure

systems

for

the

Executive

Branch.

It

also

administers

the

blind

trust

and

certificate

of

divestiture

programs

in

the

Executive

Branch.

FINANCIAL

DISCLOSURE:

PUBLIC

FINANCIAL

DISCLOSURE

The

Ethics

in

Government

Act

of

1978,

as

amended,

requires

senior

officials

in

the

executive,

legislative

and

judicial

branches

to

file

public

reports

of

their

finances

as

well

as

other

interests

outside

the

Government.

The

statute

and

the

Office

of

Government

Ethics'

(OGE)

regulations

specify

which

officials

in

the

Executive

Branch

fi

le

an

OGE

Form

278.

Unlike

confidential

fi

nancial

statements

filed

by

some

mid

-level

employees,

the

OGE

278

is

available

to

the

public.

Reviewing

officials

within

each

agency

certify

and

maintain

these

reports.

Agencies

do,

however,

forward

reports

of

Presidential

appointees

confirmed

by

the

Senate

and

certain

other

reports

to

OGE

for

additional

review

and

certification.

Although

a

financial

disclosure

report

sometimes

reveals

a

violation

of

law

or

regulation,

the

primary

purpose

of

disclosure

is

to

assist

agencies

in

identifying

potential

conflicts

of

interest

between

a

fi

ler's

official

duties

and

the

fi

ler's

private

fi

nancial

interests

and

affiliations.

Once

a

reviewing

official

identifies

a

potential

conflict

of

interest

and

consults

with

the

fi

ler's

supervisor

as

necessary,

several

remedies

are

available

to

avoid

an

actual

or

apparent

violation

of

Federal

ethics

laws

and

regulations.

Certain

senior

officers

and

employees

of

the

Executive

Branch

are

required

to

fi

le

a

public

report

(SF

278,

Public

Financial

Disclosure

Report)

disclosing

their

financial

interests

as

well

as

the

interests

of

their

spouses

and

minor

children.

Public

fi

lers

must

report

the

following:

•

Any

interest

in

property

held

in

a

trade

or

business

or

for

investment

or

the

production

of

income

(real

estate,

stocks,

bonds,

securities,

futures

contracts,

beneficial

interests

in

trusts

or

estates,

pensions

and

annuities,

mutual

funds,

etc.)

that

meet

reporting

thresholds.

1.2.29

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource Management

Environment

Competency

Area

2:

Manpower

Management

•

Earned

income,

retirement

benefits,

honoraria,

and

any

other

non

-investment

income.

•

Gifts

and

reimbursements

that

meet

reporting

thresholds.

•

Liabilities

(personal

loans

form

certain

family

members,

a

mortgage

on

a

personal

residence,

an

automobile

loan,

furniture

and

appliance

loans,

and

revolving

charge

accounts

that

do

not

exceed

$10,000

at

the

close

of

the

reporting

period

are

excluded

from

reporting).

•

Agreements

or

arrangements

with

respect

to

future

employment,

leaves

of

absence,

and

continuation

of

payments

or

benefits

from

a

former

employer.

•

Outside

positions

such

as

an

officer,

director,

trustee,

general

partner,

proprietor,

employee,

or

consultant

of

any

organization

(positions

with

religious,

social,

fraternal,

or

political

entities

are

excluded,

as

are

solely

honorary

positions).

FINANCIAL

DISCLOSURE:

CONFIDENTIAL

FINANCIAL DISCLOSURE

Certain

other,

less

-senior

Executive

Branch

employees

whose

duties

involve

the

exercise

of

discretion

in

sensitive

areas

such

as

contracting,

procurement,

administration

of

grants

and

licenses,

and

regulating

or

auditing

non

-Federal

entities

are

required

to

fi

le

confidential

financial

disclosure

reports

(OGE

Form

450).

This

reporting

system

generally

tracks

the

approach

of

the

public

disclosure

system,

with

some

differences.

Ranges

of

values

of

assets

and

income

from

assets

are

not

required

to

be

reported;

nor

are

interests

in

or

income

from

bank

accounts,

money

market

mutual

funds,

U.S.

obligations,

and

Government

securities.

The

most

notable

difference

is

that

confidential

reports

are

not

available

to

the

public.

FINANCIAL

DISCLOSURE: REMEDIES

FOR

AVOIDING

POTENTIAL

CONFLICTS

OF

INTEREST

There

are

several

options

available

to

senior

officers

and

employees

of

the

Executive

Branch

who

are

at

risk

of

conflict

of

interest.

These

options

are

described

below.

•

Recusal.

One

remedy

that

is

often

appropriate

for

avoiding

a

potential

conflict

of

interest

is

recusal

or

disqualification.

This

simply

means

that

the

employee

does

not

participate

in

a

matter

that

could

affect

the

employee's

fi

nancial

interest.

•

Waivers.

Another

remedy

for

dealing

with

conflicts

of

interest

is

the

use

of

waivers.

An

individual

waiver

of

the

statutory

bar

may

be

granted

by

an

authorized

official

when

the

conflicting

financial

interest

is

not

substantial.

For

example,

an

official

might

grant

a

waiver

if

the

employee

owned

only

a

few

shares

of

a

particular

stock.

Waivers

may

also

be

granted

to

special

Government

employees

serving

on

advisory

committees.

The

OGE

is

authorized

to

issue

regulatory

waivers

for

certain

classes

of

financial

interest,

and

such

a

regulation

was

recently

issued

as

a

final

rule.

Finally,

waivers

are

available

for

dealing

with

conflicts

that

arise

from

fi

nancial

interests

derived

from

Native

American

birthrights.

•

Certificates

of

Divestiture.

Section

1043

of

the

Internal

Revenue

Code

provides

for

the

deferral

of

capital

gains

taxes

on

assets

that

must

be

sold

to

comply

with

ethics

program

requirements.

Proceeds

from

divested

assets

must

be

reinvested

in

certain

specified

categories

of

investments.

This

change

allows

for

a

more

fl

exible

remedy

to

conflicts

that

avoid

subjecting

an

Executive

Branch

employee

to

costly

tax

consequences

that

would

otherwise

result

from

the

sale.

In

order

to

take

advantage

of

the

tax

deferral

mechanism,

a

Certificate

of

Divestiture

must

be

obtained

from

the

OGE

before

the

sale

occurs.

Certificates

of

Divestiture

are

issued

by

the

OGE

in

accordance

with

its

procedures

and

policies.

•

Trusts.

A

blind

trust

may

be

available

as

a

remedy

for

a

potential

conflict

of

interest.

In

order

to

be

recognized,

the

trust

must

include

certain

required

provisions

in

the

trust

instrument

and

have

an

approved

independent

trustee.

A

blind

trust

must

be

approved

by

the

Director

of

OGE

before

it is

executed.

There

is

no

requirement

that

a

person

use

a

blind

trust

as

a

means

of

resolving

potential

conflicts

of

interest.

Generally,

a

blind

trust

will

be

appropriate

when

the

holdings

are

of

such

an

array

and

magnitude

that

creation

of

a

qualified

trust

would

be

the

most

practical

means

of

avoiding

conflicts.

1.2.30

Copyright

0

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Impartiality

in

Performing

Official

Duties

Executive

Branch

employees

are

required

to

consider

whether

their

impartiality

may

be

questioned

whenever

their

involvement

in

a

particular

matter

might

affect

certain

personal

and

business

relationships.

A

pending

case,

contract,

grant,

permit,

license,

or

loan

are

some

examples

of

particular

matters

involving

specific

parties.

General

rulemaking,

on

the

other

hand,

is

not.

If

such

a

matter

would

have

an

effect

on

the

fi

nancial

interest

of

a

member

of

the

employee's

household,

or

a

person

with

whom

the

employee

has

a

"covered

relationship,"

or

represents

a

party

to

such

a

matter,

then

the

employee

must

consider

whether

a

reasonable

person

would

question

the

employee's

impartiality

in

the

matter.

If

the

employee

concludes

that

there

would

be

a

perceived

problem,

then

the

employee

should

not

participate

in

the

matter

unless

authorized

by

the

agency.

An

employee

has

a

"covered

relationship"

with

the

following

persons:

•

A

person

with

whom

the

employee

has

or

seeks

a

business,

contract,

or

other

fi

nancial

relationship.

•

A

person

who

is

a

member

of

the

employee's

household

or

with

whom

the

employee

has

a

close

personal

relationship.

•

A

person

for

whom

the

employee's

spouse,

parent,

or

dependent

child

serves

as

an

officer,

director,

trustee,

general

partner,

agency,

attorney,

consultant,

contractor,

or

employee.

•

Any

person

for

whom

the

employee

has,

within

the

last

year,

served

as

officer,

director,

trustee,

general

partner,

agent,

attorney,

consultant,

contractor,

or

employee.

•

Any

organization

in

which

the

employee

is

an

active

participant.

An

employee

may

have

a

concern

that

circumstances

other

than

those

expressly

described

in

the

regulation

may

raise

a

question

regarding

the

employee's

impartiality.

In

such

a

situation,

the

employee

should

follow

the

procedures

described

in

the

regulation

to

determine

whether

or

not

participation

in

the

particular

matter

would

be

appropriate.

Some

persons

who

enter

Government

service

may

receive

a

special

severance

payment

or

other

benefit

that

their

former

employer

does

not

make

to

other

departing

employees

not

entering

into

Federal

service.

If

such

a

payment

made

prior

to

entering

Government

service

is

in

excess

of

$10,000

and

if

certain

other

factors

are

present,

then

the

employee

is

disqualified

for

two

years

from

participating

in

any

matter

in

which

the

former

employer

is

a

party

or

represents

a

party.

The

agency

may

waive

or

shorten

the

disqualification

period.

Seeking

Other

Employment

Executive

Branch

employees

may

not

participate

in

any

particular

Government

matter

that

will

affect

the

financial

interests

of

a

person

or

entity

with

which they

are

seeking

employment.

An

employee

is

considered

to

be

seeking

employment

if:

•

The

employee

is

engaged

in

actual

negotiations

for

employment.

•

A

potential

employer

has

contacted

the

employee

about

possible

employment

and

the

employee

makes

a

response

other

than

rejection.

•

The

employee

has

contacted

a

prospective

employer

about

possible

employment

(unless

the

sole

purpose

of

the

contact

is

to

request

a

job

application

or

if

the

person

contacted

is

affected

by

the

performance

of

the

employee's

duties

only

as

part

of

an

industry).

An

employee

is

considered

no

longer

seeking

employment

if:

•

Either

the

employee

or

the

prospective

employer

rejects

the

possibility

of

employment

and

all

discussions

of

possible

employment

have

ended.

1.2.31

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

•

Two

months

have

elapsed

since

the

employee's

dispatch

of

an

unsolicited

resume

and

the

employee

has

received

no

expression

of

interest

from

the

prospective

employer.

In

some

cases,

the

employee

may

be

authorized

by

an

agency

official

to

participate

in

particular

matters

from

which

he/she

would

otherwise

have

to

be

disqualified

due

to

his/her

job

search.

If

a

search

fi

rm

or

other

intermediary

is

involved,

the

employee

is

not

disqualified

unless

the

intermediary

identifies

the

prospective

employer

to

the

employee.

Misuse

of

Position

Executive

Branch

employees

must

not

use

their

public

offices

for

their

own,

or

another's,

private

gain.

Employees:

•

May

not

use

their

positions,

titles,

or

any

authority

associated

with

their

office

to

coerce

or

induce

a

benefit

for

themselves

or

others.

•

May

not

use

or

allow

the

improper

use

of

non-public

information

to

further

a

private

interest,

either

their

own

or

another's.

•

May

not

use

Government

property

(office

supplies,

telephones,

computers,

copiers,

and

any

other

property

purchased

with

Government

funds

)

for

other

-than

-authorized

purposes.

•

May

not

misuse

official

time.

This

includes

the

employee's

own

time

as

well

as

the

time

of

a

subordinate.

Outside

Activities

Executive

Branch

employees

are

subject

to

a

number

of

limitations

regarding

the

outside

activities

in

which

they

may

be

involved.

An

employee

may

not

have

outside

employment

or

be

involved

in

any

outside

activity

that

conflicts

with

the

official

duties

of

the

employee's

position.

An

activity

conflicts

with

official

duties

if:

•

It

is

prohibited

by

statute

or

by

the

regulations

of

the

employee's

agency.

•

The

activity

would

require

the

employee

to

be

disqualified

from

matters

so

central

to

the

performance

of

the

employee's

official

duties

as

to

materially

impair

the

employee's

ability

to

carry

out

those

duties.

Employees

of

some

agencies

may

be

required

by

their

agency's

own

supplemental

conduct

regulations

to

obtain

prior

approval

before

engaging

in

certain

outside

employment

or

activities.

Employees

generally

may

not

be

paid

for

outside

teaching,

speaking,

and

writing

if

these

activities

relate

to

the

employee's

official

duties.

However,

there

is

an

exception

that

would

allow

an

employee

to

be

paid

for

teaching

certain

courses

at

accredited

educational

institutions.

An

employee

may

not

use

his/her

official

title

or

position

(except

as

part

of

a

biography

or

for

identification

as

the

author

of

an

article

with

an

appropriate

disclaimer)

to

promote

a

book,

seminar,

course,

program,

or

similar

undertaking.

Employees

may

engage

in

fundraising

in

a

personal

capacity,

subject

to

several

restrictions.

An

employee

cannot:

•

Solicit

funds

from

subordinates.

•

Solicit

funds

from

persons

who

have

interests

that

may

be

affected

by

the

employee's

agency,

such

as

those

who

are

regulated

by,

seeking

official

action

from,

or

doing

business

with

the

agency.

•

Use

or

permit

the

use

of

the

employee's

official

title,

position,

or

authority

to

promote

the

fundraising

effort.

1.2.32

Copyright

0

2000,

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Honoraria

Compensation

for

a

lecture,

speech,

or

writing

may

be

restricted

by

the

honoraria

prohibition

of

5

USC

501

and

5

CFR

2636.

However,

on

February

22,

1995,

the

U.S.

Supreme

Court

decided

United

States

v.

National

Treasury

Employees

Union,

affirming

a

court

of

appeals

decision

enjoining

enforcement

of

the

honoraria

prohibition

against

Federal

employees

below

grade

GS

-16.

The

ban

may

still

be

enforceable

against

Federal

employees

in

grades

GS

-16

or

above

and

those

paid

under

other

schedules.

The

restrictions

of

5

CFR

2635.807(a)

continue

to

apply

to

all

DoD

employees,

including

the

prohibition

on

receiving

compensation

for

teaching,

speaking,

and

writing

that

relates

to

their

official

duties

(subject

to

an

exception

for

teaching

certain

courses).

A

DoD

employee

who

uses

or

permits

the

use

of

his/her

military

grade

or

who

includes

or

permits

the

inclusion

of

his/her

title

or

position

as

one

of

several

biographical

details

given

to

identify

himself/herself

in

connection

with

teaching,

speaking

or

writing

shall

make

a

disclaimer

if

the

subject

of

the

teaching,

speaking,

or

writing

deals

in

significant

part

with

any

ongoing

or

announced

policy,

program

or

operation

of

the

DoD

employee's

agency

and

the

DoD

employee

has

not

been

authorized

by

appropriate

agency

authority

to

present

that

material

as

the

agency's

position.

The

required

disclaimer

shall

expressly

state

that

the

views

presented

are

those

of

the

speaker

or

author

and

do

not

necessarily

represent

the

views

of

DoD

or

its

Components.

Where

a

disclaimer

is

required

for

an

article,

book

or

other

writing,

the

disclaimer

shall

be

printed

in

a

reasonably

prominent

position

in

the

writing

itself.

Where

a

disclaimer

is

required

for

a

speech

or

other

oral

presentation,

the

disclaimer

may

be

given

orally

provided

it

is

given

at

the

beginning

of

the

oral

presentation.

Post

-Employment

Executive

Branch

employees

are

subject

to

certain

restrictions

on

their

activities

after

they

leave

Government

service.

Two

of

the

restrictions

apply

to

matters

involving

specific

parties

with

whom

they

were

involved

while

in

Government

service.

•

If

the

employee's

involvement

in

such

a

matter

was

personal

and

substantial,

then

the

employee

is

permanently

barred

from

representing

anyone

on

that

same

matter

to

any

Federal

department,

agency,

or

court.

•

If

the

matter

was

under

the

employee's

official

responsibility

during

the

last

year

of

Government

service,

then

the

employee

is

barred

for

two

years

after

leaving

Government

service

from

representing

anyone

on

that

same

matter

to

the

Government.

In

addition,

certain

high-level

officials

are

subject

to

a

so-called

"one-year

cooling

-off

period."

For

a

period

of

one

year

after

leaving

a

senior

position,

the

official

may

not

make

any

appearance

on

behalf

of

any

person

(other

than

the

United

States)

before

his

former

agency

with

the

intent

to

influence

the

agency

on

any

matter

in

which

that

person

seeks

official

action.

Employees

who

participated

personally

and

substantially

in

ongoing

trade

or

treaty

negotiations

and

had

access

to

certain

information

are

subject

to

a

one-year

restriction

after

they

leave

Government

service

on

representing,

aiding,

or

advising

anyone

concerning

those

ongoing

trade

or

treaty

negotiations.

Former

very

senior

employees

are

subject

to

an

additional

restriction

during

the

first

year

after

they

have

left

Government

on

the

person

throughout

the

Executive

Branch

who

may

be

contacted.

Former

senior

and

very

senior

employees

are

restricted

for

one

year

after

leaving

Government

service

from

representing,

aiding,

or

advising

foreign

governments

or

foreign

political

parties

before

an

agency

or

department

of

the

United

States.

1.2.33

Copyright

C)

2000.

revised

2018

(v20185)

by

the

American

Society

of

Military

Comptrollers.

All

gh

s

reserved

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

Additionally,

certain

persons

appointed

on

or

after

January

20,

1993,

must

sign

an

ethics

pledge

that

establishes

a

contractual

commitment

regarding

their

activities

after

they

have

been

employed

as

"senior

appointees"

or

after

they

have

participated

personally

and

substantially

in

trade

negotiations.

Representation

to

Government

Agencies

and

Courts

Executive

Branch

employees

are

subject

to

criminal

statutes

that

prohibit

the

representation

of

private

interests

before

the

Government.

One

of

these

laws

prohibits

an

employee

from

prosecuting

a

claim

against

the

United

States

or

representing

a

private

party

before

the

Government

in

connection

with

a

particular

matter

in

which

the

United

States

is

a

part

or

has

a

direct

and

substantial

interest.

This

prohibition

applies

whether

or

not

the

employee

receives

compensation

for

the

representation.

There

are

exceptions

that

would

allow

an

employee

to

represent

the

following

with

or

without

compensation:

•

The

employee;

•

A

parent,

spouse,

or

child

of

the

employee;

or

•

A

person

or

estate

for

which

the

employee

serves

as

a

guardian,

executor,

administrator,

trustee,

or

personal

fi

duciary.

The

matter

involved

must

not

be

one

in

which

the

employee

participated

personally

and

substantially

or

which

was

the

subject

of

the

employee's

official

responsibility.

Also,

the

employee

must

obtain

approval

for

the

activity

from

the

employee's

appointing

official.

An

employee

may

represent

employee

non-profit

organizations

(such

as

child-care

centers,

recreational

associations,

professional

organizations,

credit

unions,

or

other

similar

groups)

before

the

U.S.

Government

under

certain

circumstances.

The

employee

may

not

be

compensated.

The

employee

may

not

represent

an

employee

group

in

claims

against

the

Government;

in

seeking

grants,

contracts,

or

cash

from

the

Government;

or

in

litigation

where

the

group

is

a

party.

An

employee

may

take

on

uncompensated

representation

of

a

person

who

is

the

subject

of

disciplinary,

loyalty,

or

personnel

administration

proceedings.

Another

law

governing

representational

activity

prohibits

an

employee

from

accepting

compensation

for

certain

representational

services

before

the

Government

whether

or

not

those

services

were

provided

by

the

employee

personally

or

by

some

other

person.

Again,

there

are

exceptions

to

this

law

that

would

allow

for

the

representation

of

a

parent,

spouse,

child,

or

other

person

who

served

in

a

fi

duciary

capacity.

Supplementation

of

Salary

Executive

Branch

employees

may

not

be

paid

by

any

agency

other

than

the

United

States

Government

for

doing

their

Government

jobs.

Thus,

for

example,

a

highly

paid

executive

of

a

corporation,

upon

entering

Government

service,

could

not accept

an

offer

from

his

or

her

former

employer

to

make

up

the

difference

between

the

Government

salary

and

the

compensation

received

from

the

former

employer.

This

prohibition

does

not

apply

to

the

following:

•

Certain

special

Government

employees

and

employees

serving

without

compensation.

•

Funds

contributed

out

of

the

treasury

of

any

state,

county,

or

municipality.

•

Continued

participation

in

a

bona

fide

pension;

retirement;

group

life,

health,

or

accident

insurance;

profit-sharing;

stock

bonus;

or

other

employee

welfare

or

benefit

plan

maintained

by

a

former

employer.

•

Payments

made

to

an

employee

by

a

tax-exempt

non-profit

organization

for

travel,

subsistence,

and

other

expenses

incurred

in

connection

with

training.

•

Moving

expenses

incurred

in

connection

with

participation

in

an

Executive

exchange or

fellowship

program

in

an

Executive

agency.

1.2.34

Copyright

©

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Module

1:

Resource

Management

Environment

Competency

Area

2:

Manpower

Management

•

Reserve

military

officers

and

certain

temporarily

commissioned

military

officers

who

are

ordered

to

active

duty

may

continue

to

receive

compensation

from

individuals

who

furnished

compensation

to

them

prior

to

being

ordered

to

active

duty.

Informal

Advisory

Letters

and

Memoranda

and

Formal

Opinions

The

OGE

provides

both

informal

advisory

letters

and

memoranda

and

formal

opinions

concerning

the

application

of

the

Ethics

in

Government

Act

of

1978

(including

its

fi

nancial

disclosure

provisions),

the

criminal

conflict

of

interest

laws,

the

administrative

standards

of

ethical

conduct

and

Orders,

and

other

administrative

regulations

issued

by

the

OGE.

At

the

discretion

of

the

Director,

formal

advisory

opinions

will

be

rendered

on

matters

of

general

applicability

or

on

important

matters

of

first

impression.

Where

a

request

does

not

meet

the

requirements

for

a

formal

advisory

opinion,

the

OGE

may

respond

with

an

informal advisory

letter

or

memorandum.

The

informal

advisory

letters

and

memoranda

and

formal

opinions

for

the

period

1979-1988

have

been

published

in

a

bound

volume

by

the

Government

Printing

Office

(GPO).

Annual

supplements

to

the

bound

volume

have

been

published

in

a

loose-leaf

format

and

are

current

through

calendar

year

2002.

These

opinions

are

also

available

on

the

OGE's

Ethics

Bulletin

Board

System

(TEBBS),

The

Ethics

CD-ROM,

and

the

Ethics

Resource

Library

web

site:

http://www.USOGE.gov/.

1.2.35

Copyright

CD

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.

Enhanced

Defense

Financial

Management

Training

Course

page

intentionally

left

blank

2000.

revised

2018

(v2018a)

by

the

American

Society

of

Military

Comptrollers.

All

rights

reserved.